HUGE: IMF Is 'Considering' Participating In EU Bailout Fund

The IMF is "considering" a plan to back a special purpose
investment vehicle (SPIV) that would leverage the European
Financial Stability Facility, according to Reuters.

Analysts have been chattering about the size of IMF involvement
in the eurozone bailout, but this is the first confirmation that
the fund is actively thinking about playing an even bigger role
than it is now.

That would equate with a substantial contribution from the U.S.,
by far the largest IMF subscriber, with a quota of 17.72%.

This will no doubt be a major topic of discussion at the G20
meetings in early November.

Under the plan, an SPIV created by the EFSF that would issue
debt. Then the IMF could purchase that debt, providing more funds
to the EFSF. One Reuters source even said the fund was willing
to set up an administrative account, that would allow IMF
shareholders and maybe even sovereign wealth funds to accumulate
money to help the eurozone.

This "consideration," however, is by no means a confirmation that
the IMF will definitely be more involved.

Indeed, the U.S. has opposed amping up the size
of the bailout plan in the past, with support from Canada and
Australia. The U.S., Japan, Germany, and China said they were
confident the fund's $380 billion resources were sufficient at a
meeting of G20 finance ministers earlier this month.

"The IMF has indicated that they are considering it -- they have
not taken a position," a eurozone official told Reuters. "It will
all depend on the whole package."